As gold once again breaks the psychologically important barrier of $1,000 an ounce, all the pundits are wondering if it will last.

The UK Telegraph recently quoted at length Cheng Siwei, former vice chairman of the Standing Committee of the Chinese Communist Party. He explained how Beijing is dismayed by the “credit easing” coming out of the Federal Reserve.

That’s a question that Westerners have been asking for, oh, several millennia now. Or at least since Marco Polo aimed his ponies down the old Silk Road in 1271.

The just-concluded Group 20 (G20) meeting left us with a chorus of very “prudent” governments and central bankers singing the praises of easy monetary and fiscal conditions. So where can we take refuge when all the central banks in the world print money and governments run deficits in order to spend like drunken sailors? The answer is gold.

Barrick Gold (NYSE:ABX), the world’s largest pure-play gold miner, is about to make a very big bet on gold prices going higher. The company announced this week it will raise as much as $4 billion in a stock issuance and use the proceeds to pay off its gold hedges. In other words, Barrick is willing to give their shareholders the short-term shaft in order to rid themselves of all bets against gold.

As one more bit of proof that the education system of the United States is a dysfunctional piece of liberal crap, how else to explain the fact the far-leftist moron Michael Moore actually got funding, which assumes an interested audience, for his latest movie, titled Capitalism: A Love Story, which, according to Reuters, “launches an all out attack on the capitalist system, arguing that it benefits the rich and condemns millions to poverty.” Hahaha!

Consumer Borrowing Collapses…What’s up with sterling? Option ARMs get ready to reset…Gold falls back to below $1,000…And Now… Today’s Pfennig!

Is gold ready to break out?

Gold hit the big “quadruple digits” while we were all relaxing on Labor Day. To be sure, it was just the December contract, which has since pulled back to US$997. But we haven’t seen US$1,000 since February, back when we had an insolvent financial system and a meddling government printing trillions like toilet paper.

The US dollar is in bad shape. Over the past several years, the federal budget deficit has shot up like money is going out of style – and maybe it is.